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2 C O M M U N I C ATION MEANS BUSINESS Communication is more than a feel good part of any organization. Great internal communication helps employees connect the dots between what they do and the overarching business strategy. When it s good, it informs. When it s great, it engages employees and moves them to action. Done right, communication helps people and organizations be even better. The Bottom Line p.1 Employee Engagement and Productivity p.2 The Downside of Disengagement p.3 Employee Trust and Influence p.4

3 The Bottom Line Good communication positively impacts financial performance Companies with highly effective communication practices had 47% higher total returns to shareholders over five years ( ) compared to those with less effective communication. 1 It helps avoid the cost of misunderstanding.* enterprises due to employee misunderstanding*. 2 4 * Employee misunderstanding refers to actions or errors of omission by employees who misunderstood, misinterpreted or were misinformed about company policies, business processes, job function or a combination of the three. Cost of Status Quo: $26,041 per knowledge worker per year Waiting for information $5,320 Inefficient coordination $5,382 Unwanted communications $5,328 Time for productive work $33,426 Customer complaints $5,008 Barriers to collaboration $5,003 Average compensation for a knowledge worker in an SMB is $59,467 per year And it supports retention of talent. twice 1.

4 Employee Engagement and Productivity Engaged employees are more productive and present than their disengaged colleagues. higher productivity rate. less-engaged peers to exceed performance expectations. than the less-engaged group. Leader and manager communication is directly linked to employee engagement. 9 alone was found to increase engagement 10 than the least effective communicators to train managers to deal openly with resistance to change. 11 supervisor strongly increased employee disengagement due to poor employee morale and inadequate management and leadership. 12 Highly engaged employees outperform their disengaged colleagues by 20 to 28% -The Conference Board,

5 The Downside of Disengagement There is a measurable downside to disengagement. half of 472 worldwide organizations (48%) reported their management had not effectively communicated business strategies to employees only one-third (37%) of these organizations reported their employees were effectively aligned to the missions and visions of their businesses 14 said gaining leader and staff support is the scariest challenge they face. initiating positive action. What happens when employees become disengaged? More absenteeism due to disengagement results in More turnover Business units comprised of mostly disengaged employees have 31% more turnover than those made up of mostly engaged employees. More theft lose 51% more of their inventory. More injuries with engagement scores on the 62% more Lower customer scores groups with higher levels of engagement lead to 12% higher customer scores than those on the lower end. Lower productivity and profitability the top quartile of engagement are average 18% higher productivity and 12%

6 Employee Trust and Influence relationship with its employees on the inside has everything to do with its Trust of corporations is eroding and adding to management challenges. leaders and managers: 19 employees report having less trust in management than they did last year. decisions in times of uncertainty. honest. actions are completely consistent with their words. respondents were neutral or negative regarding their trust of supervisors. 20 Organizations that treat employees well and keep them informed build stronger internal morale and external reputations. important to corporate reputation after high quality products and services 21 information after hearing it 1-2 times when a company is distrusted. 22 IBM: a reputation built on trust Recently, IBM commissioned a compelling study that demonstrates the value of the employee advocate to a company s external profile. respondents to share opinions of opinion of the companies they were What were deemed most and least #1 in five of the seven countries and #2 in the other two employee *Brazil, Germany, Spain, Italy, India, Singapore, and Japan 4.

7 David Grossman ABC, APR, Fellow PRSA is the founder and CEO of The Grossman Group (YourThoughtPartner.com). David is both a teacher and student of effective communication and counsels some of the world s leading organizations on internal and leadership communication. He s author of the highly acclaimed, You Can t Not Communicate: Proven Communication Solutions That Power the Fortune 100 and its follow up, You Can t Not Communicate 2. Share your internal communication challenges or tips with David at dgrossman@yourthoughtpartner.com. Available at YourThoughtPartner.com/Book 2011 The Grossman Group YourThoughtPartner.com 312 N. May St. Suite 101 Chicago, IL p

8 1 Towers Watson, Capitalizing on Effective Communication, 2009/2010 Communication ROI Study Report 2 IDC Research, $37 Billion: Counting the Cost of Employee Misunderstanding, survey of 400 British and American corporations (2008) IDC Research, ibid 4 SIS International Research for Siemens Communications, Communications Pain Study: Uncovering the hidden cost of communications barriers and latency, (2009) Forbes Insights, Talent Edge 2020: Building the recovery together, survey of global employees conducted for Deloitte Consulting (2011) Towers Watson, WorkUSA Survey (2008/2009) Towers Watson, ibid Gallup, Inc., Gallup Management Journal (October 2006) 9 Towers Watson, Global Workforce Study of nearly 90,000 employees of large to midsize organizations, (2007/2008) 10 Towers Watson, O.C. Tanner 2008 Global Recognition Study of 10,000 individual workers in 13 countries 11 Towers Watson, Capitalizing on Effective Communication, 2009/2010 Communication ROI Study Report 12 International Association of Business Communicators and Best Consulting, Employee Engagement Survey 2011, of nearly 1,000 communications professionals International Association of Business Communicators (IABC), Best Practices in Employee Communication: A Study of Global Challenges and Approaches, (2005) 14 IABC, ibid Institute of Internal Communication (IoIC), United Kingdom, online survey of internal communicators (2011) reported at senior-management-dwindling-budgets-stifle-internal-comms (accessed Aug. 29, 2011) IoIC, ibid IoIC, ibid 12: The Elements of Great Managing, James Harter and Rodd Wagner, Maritz Research Employee Engagement Poll, annual attitude survey of 1,857 American adult employees who work at least 30 hours per week, March Towers Watson, O.C. Tanner 2008 Global Recognition Study of 10,000 individual workers in 13 countries 21 Edelman, Trustbarometer, 2010 global opinion leaders study 22 Edelman, Trustbarometer, 2011 global opinion leaders study